I do a calculation of RM12.5k MRTA cost financed into loan

this amount is equal to aged 28 - 30 years into 330k loan...

My interest alone will be RM9.5k+ (base on 4.2 interest)

Plus both is going to be RM22k divide by 360 months = RM61+

Why not I just add on some for MLTA since it is just another life policy. If you are still young and do not have insurance, this is a good one to go. If you already have 1, it is likely we won't end with only 1 policy.

With my case, I do consider MLTA is a better option but due to financial constrain, I opt to be covered in both ways. A little in MRTA for fewer years... but and the rest amount in MLTA for as long as I am still paying.

To add on, what if BLR goes higher and your interest will for sure increase, either way MLTA you won't lose out cause you can get back the money however do not strain yourself too much if you can't afford the monthly high premium too. A step at a time.

This post has been edited by davidlow7: Jun 5 2012, 09:20 AM

Sometimes you need to get some MRTA to actually fight for lower BLR too....

Actually if we get coverage without return....

what are the really benefit compare to MRTA as it has higher premium

I can only think of the cover can transfer to other property loan in future but other than that with rm125... it seems a bit hard for us to put in more without getting any much return which is same as MRTA... not focus on return but rather coverage only

This post has been edited by davidlow7: Jun 5 2012, 09:27 PM

Hi,

Let me share my idea and what came into my mind actually base on my current condition.
However I am not an expert and if you have any idea... let's contribute and share..

MRTA
I am quoted around RM12719 for 30 years ... loan amount of RM333k+

Finance into loan (assuming -BLR 2.4 = 4.2)

Interest @ RM9762.31
Premium @ RM 12719
TOTAL = RM 22391.31

Monthly payment = RM62.20 /mth (30 years)

Assuming without interest = RM 35.33 (This is to actually use to calculate the premium difference between MRTA vs MLTA with same coverage)

As you know MRTA is something you shall not expect any returns and MLTA is a long term plan that not only cover yourself but also to give you some savings/returns for a better financial planning such as early house loan settlement etc.

Put coverage aside as they are both same, so the selling points of MLTA should be focus on savings/return.

If MLTA does not focus on your returns, what is the point of throwing an extra RM 62.8 (RM 125 MLTA as quoted above - RM 62.2).

If you put it without interest calculation the difference of the premium is RM 89.67 (RM125 - RM35.33) (so we now have an idea how much extra MLTA costs us over MRTA in actual)

It is important to find out if the extra RM62.8 or RM 89.67 does justify for us to go for MLTA. Definitely tax relief in this MLTA will not justify for the extra we paid in premium.

The cash value base on projected returns (although not guaranteed) remains an important thing as insurance charges when you are old keep increasing and will you need to top up in future in order to keep the policy alive?

The current RM125 does cover 36CI? If yes, how about the cash value as it will not look good as insurance charges increase? Definitely you will not want to be asked to pay for a higher premium if you want to continue being covered when you are old. That's my point of understanding the whole proposal and planning something ahead as insurance is all about financial planning too.

The reason pops out in my mind with my current idea of mixing both MRTA and MLTA in my newly purchased home since I am on very tight budget.
MRTA to cover partial amount of the house and the remaining cover with MLTA since in my life I won't be ending with 1 life policy anyway yet it can be considered as a saving to actually help me in later years plus some minor tax relief.

If God willing, I have some better increment this year I will surely add more.

Basically, I just need to be justified of the extra premium I am paying for the same coverage. The MLTA is transferable still does not justify in the above calculation.

However the above idea and calculations are purely base on my current situation and it may not suit you. However inputs are really appreciated.

Cheers

This post has been edited by davidlow7: Jun 6 2012, 12:09 AM

True.

Uhh perhaps if we are able to get any insurance advisor around here to enlighten us on this?

Actually approaching insurance agent for MRTA is always better than bank.

You can choose an agent you trust that can advise better. Usually banker is of no knowledge of all these and just simply ask you to dump in a rate.

The only issue is if you approach insurance company, you need to pay all these in one lump sum while getting from bank may help you refinance into loan. Although issue getting from bank is usually not transferable to another bank in the event of any refinancing with other bank (You may want to reconfirm with your bank on this)

Yes usually if you buy outside separately..... it can be done.

Just changing the "beneficiary" basically.

It all depends on how you see it

I made a calculation before in my previous posting... which you may search through my profile..

MRTA due to the interest I am committing about RM 61 per month which is also quite high as a commitment.. But it all depends on you personally..

I made that calculation and decision based on what suit me. I know I am surely going to get 1 more insurance premium in future for myself and why not I make it this 1 shot rather committing 30 years + interest for MRTA. In the event if I am going to sell the house, the surrender value is pretty minimal.

Not to forget you are entitled for tax relief. If tax relief for EPF + Life is full. You can always park 60% into your medical/education portion of maximum RM3000.

Cheers

This post has been edited by davidlow7: Jun 15 2012, 11:24 AM